Haryana Farmers Call Khattar Govt’s Interest and Penalty Waiver a ‘Political Stunt’

The Haryana government’s decision to waive Rs 4,750 crore in interest and penalties on crop loans has drawn criticism, with many describing it as a stunt ahead of the state elections in November.

What was announced

Speaking in Bhiwani district on Monday, Chief Minister Manohar Lal Khattar said the waiver would go to 10 lakh farmers who had taken loans from three state-owned lenders and failed to repay them: the Land Mortgage Bank (LMB), the District Cooperative Central Bank (DCCB) and the Primary Agriculture Cooperative Society (PACS). He said the loans of roughly 8.25 lakh PACS borrowers, 32,000 DCCB borrowers and 70,000 LMB borrowers had turned into non-performing assets. The relief removes the penal interest building up on the principal.

Farmers’ objections

Rakesh Kumar Bains, from the Bharatiya Kisan Union, said farmers had wanted their entire loans written off, but the government covered only cooperative bank loans and left out national banks, where most farmers borrow. He said most farmers hold Kisan Credit Cards from national banks and use them to borrow for tractors, pesticides, equipment and irrigation.

Jaswinder Singh, a farmer from Shahabad in Kurukshetra district, called the move an election stunt. He said he owes Rs 90,000 to a cooperative bank but gains nothing, since only defaulters qualify, and they must first repay the principal to benefit, which they could not afford in the first place. “There is not a single farmer in Haryana who doesn’t owe money to a national bank,” he said. Cooperative banks mostly lend small sums of up to Rs 90,000, often in cash, while national banks lend at least Rs 1 lakh against holdings of 1 acre or more.

An analyst’s view

Despite repeated efforts, neither the state agriculture minister nor the director of the agriculture and farmers welfare department was available for comment. Food and trade policy analyst Devinder Sharma said the announcement would help several farmers but did not tackle wider gaps in farm policy, since treating a missed instalment as a bad loan, as in industry, keeps farmers trapped in debt. He suggested the money could instead have been added to PM-Kisan income support, with landless farmers included.

Sharma pointed to Kerala’s State Farmer’s Debt Relief Commission as a model. Set up in January 2007 after a series of farmer suicides, it considers applications and has the power to write off as much as 75 per cent of a debt. By May 2018 it had received 4,40,801 applications.

What happened next

In the 2019 Haryana assembly election, the BJP won 40 seats, the Congress 31 and the Jannayak Janta Party 10, and Manohar Lal Khattar was Chief Minister after the election.

See also: Elections | Bharatiya Janata Party

Originally published on 4 September 2019. Rewritten on 9 October 2026.

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